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Sun, Intel Announce New Partnership

Updated: In their joint announcement, Intel agreed to support the Solaris OS, while Sun will use a number of different Xeon processors in its x86 line of servers and workstations.

After spending years apart, Sun Microsystems and Intel have agreed to team up.

In an announcement just a day before its due to release it latest quarterly results, Sun CEO Jonathan Schwartz told an audience in San Francisco on Jan. 22 that his company would produce new Xeon-based x86 servers and workstation by later in 2007.

In turn, Intel announced that it would now support Suns Solaris operating system and would encourage ISVs (independent software providers) to support Solaris on Xeon platforms, thus giving Sun access to a much broader audience. The agreement also means that Intel will also support open-source communities from Sun, including OpenSolaris, open Java and NetBeans.

While the benefits to a collaborative effort between Sun and Intel are obvious, the agreement is also seen as a blow to Advanced Micro Devices, which had been an exclusive provider of x86 server processors—Opteron—to Sun for the past several years. The agreement now also places Sun on the same playing field as other top x86 server providers such as Hewlett-Packard, IBM and Dell, which offer both AMD and Intel processors in their respective server products.

This makes the deal between Intel and Sun a win-win deal for both companies, said Gordon Haff, an analyst with Illuminata, in Nashua, N.H.

For Sun, the announcement gives the company a chance to increase its product line and show its customers that it can offer them whatever product they are looking for, be it AMD- or Intel-based, he said.

"I think, in general, Sun has been really aggressive with its x86 product line and this is where they have to go," Haff said. "For a while, when Sun was only an AMD shop, that [relationship] proved to be the differentiator. Now, Sun has a much broader and much more mature product line, and the company really needs to be able to offer products from both companies."

For Intel, according to Haff, the agreement gives the Santa Clara, Calif., chip maker another OEM to sell its technology to, while trying to keep distance between itself and AMD.

"Its a very tough competitive battle between them," Haff said. "For a while there, Intel got lazy and they kind of viewed themselves as the only game in town."

The agreement between Sun, which is also based in Santa Clara, was first detailed in the Wall Street Journal. When formalizing the announcement, Schwartz, who took over Sun as its CEO and president in April 2006, called the partnership an important move for the two companies.

"For us, its an historical moment," Schwartz told the audience, adding that both companies have a chance to benefit from the exchange of technologies and engineering expertise each brings to the table.

Schwartz told the audience that the time was right for Sun to offer both x86 servers and workstations that will use single-core, dual-core and quad-core Xeon processors. With 7 million Solaris 10 licenses sold, the companys growth during the past few financial quarters and the changing nature of the marketplace, Schwartz said it was the right time to work with Intel.

For Intel, CEO Paul Otellini said the agreement gives Intel a bigger presence in the enterprise server space, especially in the financial sector and within telecommunications. The partnership also allows Intel to collaborate with Sun on issues ranging from virtualization to data center solutions to high-performance computing.

Beyond the new hardware, by endorsing Solaris, Intel has now allowed the operating system to compete on the same "Tier-1" scale as Microsoft and Linux, Schwartz said.

The first Sun x86 servers to use Intels Xeon processors should hit the market by the second half of this year, although Schwartz and Otellini did not give a firm date for the official launch. A version of Solaris that will run on Xeon processors is already available as a download from Sun.

After turning away from Intel processors, Sun has used AMDs Opteron processors in its x86 server line, called "Galaxy." While Sun has used AMDs processors exclusively for the past few years, it never fully closed the door on the possibility of using Intel in some of its x86 server products.

During the announcement, Schwartz mentioned that the two companies had a history of sniping at one another, but the Jan. 22 announcement showed the two companies seek to move past that animosity.

After turning away from Intel processors, Sun has used Advanced Micro Devices Opteron processors in its x86 server line. With the Jan. 22 pending announcement, Sun will join its larger competitors—Hewlett-Packard, Dell and IBM—as major IT companies that offer AMD and Intel processors.

Sun also produces its own line of multi-core processors for its servers as well. In addition to the UltraSPARC T1 processor, which uses eight cores, Sun is preparing to release its latest processor—called Rock—in 2008. Rock will use 16 cores.

When the Rock processor is released in 2008, Sun is planning to include it in its mid-level and high-end servers.

For years, Sun has struggled in the server market, although several recent surveys by IDC and Gartner have shown that Sun has started to pick up some of its lost market share. Since taking over the company in April 2006, Schwartz has also tried to reinvigorate the company, specifically by pushing the use of AMD and its own "Niagara" processors.

The move to include Intel would seem like a natural extension of the plan that Schwartz has envisioned for the company.

The announcement will also mean a big boost for Intel, which has been aggressively trying to take advantage of its quad-core offering.

The two chip makers have been aggressively jockeying for the upper hand in the market for the past year. Intel stuck first when Apple announced that it would start using its processors in Macintosh desktops and notebooks. AMD scored some points when Dell announced that it would start using its Opteron processors.

In a statement released Jan. 22, Henri Richard, AMDs chief sales and marketing officer, said his company welcomed the competition and called the announcement a positive result for the users.

"AMD believes in competition as a positive force," Richard said, according to the statement.

"Sun was among the first to listen to its customers and offer choice through AMD to a long-monopolized x86 server market," Richard continued. "As advocates for choice, AMD recognizes Suns desire to provide the same for its customers."

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